William Taylor Memorial Lecture- number 9Two Cheers for Financial StabilityHoward Davies, Director of the LSEWashington 25
I was greatly honoured when Paul Volcker asked me to deliver tonight’slecture, which I believe is the 9
in what has so far been a very distinguishedseries. I know the series is distinguished because, in preparation for thisevening, I read the previous 8 lectures. They are mostly available from theG30 at the modest price per unit of $10, though the last 2, by Stan Fischerand Bill McDonough, can be had for $10 the pair
. This is an unusualexample of dramatic price deflation which I am sure Paul Volcker, in hisprofessional life at the Federal Reserve, would have tried hard to avoid.Sadly, I did not have the opportunity to know Bill Taylor personally, since Icame into the world of banking supervision only in 1995. But I know of hiswork by reputation, and I am sure that Bill McDonough was right to describehim, in 2002, as a man who “embodied the ideals of a central banker andbank supervisor: measured, professional and impartial”
. We would all beproud to have such adjectives associated with us at the end of our careers.Bill Taylor also, of course, served as Chairman of the FDIC. In the UnitedKingdom, for historical reasons, we have no obviously equivalent body, butwe are well aware of the hugely important role which the FDIC plays in the American banking system, as the penultimate line of defence in the event of abanking crisis.I hope that my subject matter this evening, Financial Stability, would havebeen of interest to Bill Taylor in both his key roles, at the Fed and the FDIC.He may have been puzzled by my title: “Two cheers for Financial Stability”,with its implication that my enthusiasm for the concept is somewhat qualified.
The William Taylor Memorial Lectures 7 and 8. Stanley Fischer and William J. McDonough(www.group30.org)